GlobalFoundries pulls back from previously close IBM relationship

By Larry Rulison

Published 7:18 pm, Friday, December 13, 2013

The high-tech partnership between GlobalFoundries and IBM appear to be souring.

Over the past two years, GlobalFoundries, which operates its Fab 8 computer chip factory in Malta, has been slowly distancing itself from IBM and the $900 million in research and development programs that the two companies share here and in East Fishkill.

Changes to the relationship include GlobalFoundries pulling employees out of IBM sites and the new $2 billion manufacturing lab known as the Technology Development Center, or TDC, that GlobalFoundries is building for itself at the Fab 8 site.

Neither GlobalFoundries nor IBM would discuss specifics about their relationship, and GlobalFoundries says that its work with IBM is critical to its operations.

"We continue to believe that a collaborative approach to (research and development) is the best way to develop leading-edge technology," GlobalFoundries spokesman Jason Gorss said. "We have ramped up internal development capabilities at the Fab 8 campus — including the construction of the TDC — to help speed the introduction of new technologies into high-volume production."

Gorss said GlobalFoundries still has people working with IBM in East Fishkill and in Albany. And he said the IBM Alliance will remain "the centerpiece" of GlobalFoundries' research efforts even as the company builds internal capabilities.

IBM did not respond to requests for comment on its relationship with GlobalFoundries.

The ties date back to 2009 when Advanced Micro Devices spun off its manufacturing operations to create GlobalFoundries. AMD revealed in regulatory documents that the partnership was to last through 2015 and required roughly $900 million in payments to IBM.

The program is officially called the International Semiconductor Development Alliance, or the IBM Alliance. Other chip companies are members of the alliance, which is also known as the "fab club" or the "Fishkill club" to industry insiders. The group also benefits from IBM's early-stage development work at the NanoCollege in Albany.

When GlobalFoundries started hiring engineers in New York state after breaking ground for Fab 8 in July 2009, some were sent to East Fishkill to participate in the IBM Alliance.

However, in mid-2012, as Fab 8 became operational, some of the IBM Alliance jobs — perhaps as many as 200 — were moved to Malta. Industry observers saw the move as part of an effort by GlobalFoundries to assert more control over its manufacturing process following a period in late 2011 when GlobalFoundries was having manufacturing problems with new chips being made for AMD at its Dresden, Germany, factory.